A city in the dark

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Every community has them - the questions that you just don't ask. In Hong Kong, lots of people want to know: 'Why is the sky black?' But they avoid the related question: 'Who dunnit?' The reason is easy to understand, because nearly every one of us bears part of the responsibility. If the novelist Michael Crichton were to write a thriller about Hong Kong's air quality, titled perhaps Dark City, its characters would include tycoons, their Shenzhen mistresses, earnest bureaucrats, corrupt officials, limousines with dual licence plates zooming across the border, lots of unwitting bystanders and an inconvenient legislator with a big mouth.

The legislator might be someone like Choy So-yuk, Hong Kong's Bella Abzug lookalike. On Wednesday, she asked Environment Secretary Edward Yau Tang-wah a few sharp questions, in the course of a Legislative Council session. How many factories does Hong Kong have in the Pearl River Delta? How much damage are they doing to the air? And what are we doing about it?

The context was a mid-term review of air-quality targets by the Hong Kong and Guangdong governments, released to the public on January 8. The study found that, due to undercounting of emissions in 1997 - the base year - emissions would exceed the 2010 targets by 89 per cent for respirable suspended particulates, 40 per cent for nitrogen oxides and 38 per cent for sulphur dioxide.

'It's absurd,' said the redoubtable Ms Choy, a long-standing member and former chairperson of Legco's environment panel. 'How could you only tell the public 10 years later? Now the government is saying it can make it up in terms of the percentage but not in terms of the absolute amount. And why are we not scolding our own people over there?'

Mr Yau's answer, delivered in session, repeated information that had already been made public with the release of the mid-term review. The original data from Guangdong left out such polluting industries as cement, ceramics and mining, accounting for the miscalculation.

The lack of such data is a bit like leaving the cheese out of a cheese sandwich. But the more profound omission is one of spirit. The absence of factory-based waste and air-pollutant inventories that would enable regulators and the public to clearly identify offenders suggests that nobody, on either side of the border, really wants to know. For 30 years, as Hong Kong and Guangdong developed a nimble economic compact that left both much richer, that has probably been true.

The history is, by now, familiar and in the process of repeating itself. Although the official statistics are fuzzy, roughly one-third of Guangdong's factories are funded or run by Hong Kong owners, who jumped at the chance provided by China's economic reforms in 1978, when rising costs and new environmental rules put an end to Hong Kong's own manufacturing economy based on light industry.

Now the era of carpetbagger capitalism is ending in Guangdong, as the province moves up-scale into hi-tech, heavy manufacturing and logistics, stranding many of the estimated 57,000 Hong-Kong-owned or operated factories in Guangdong. Instead of regulating by emission caps and standards, the mainland government is simply eliminating tax and import duty relief for industries that pollute or consume too much energy. Such favours were key to the industrial policy that created the first phase of the Delta miracle. The combination of a new, uniform corporate tax, labour law and public auctions for industrial land will force tens of thousands of small-scale processing industries out of the high-cost urban centres of the Delta. And thus a new exodus of Hong Kong's textile, toy, plastics and other light industrial products will begin.

Where does it end? If Hong Kong companies were kept to a stricter environmental standard in the first place, or invested in research and development, they would not now be in the position of second-class industrial citizens, forced to migrate if they cannot change their line of business from plastic to plasma.

In his response to Ms Choy, the environment secretary said that the government's HK$93 million grant to the Hong Kong Productivity Council would address the problems of Hong Kong's energy-intensive cross-border factories. The programme is a band-aid solution, providing matching grants of HK$15,000 for 800 to 1,000 factories to conduct energy-saving assessments and up to HK$160,000 each for another 90 pilot projects, on a voluntary basis. There is no naming, shaming or statutory enforcement, or financial support for retrofitting or installing small-scale gas turbines or any of the other technologies that might be required. Simple maths indicates that less than 2 per cent of Hong Kong factories in Guangdong may benefit.

Hong Kong's air pollution, bad though it is on these cold winter days, is a symptom of a larger problem. Its economic partnership with Guangdong and the Delta is being replaced by competition across a range of industries. To survive, Hong Kong must start asking tough questions, and find the political will and resources to get things done. We could do worse than starting with the air, paying for the cleanup of our own polluters in the Delta - as well as those back home.

Edith Terry is the author of Beyond the Pearl River Delta: The Contest Begins, to be published by Civic Exchange next month